Federal Spending Under Obama’s 2016 Budget Show Ever Increasing/Unsustainable Annual Deficits

The following excerpts from the non-partisan Congressional Budget Office (CBO) analysis of the Federal Budget show a dozen projections looming over America’s economic future.

The quotes are taken from: CBO’s 19 Jan 2016 “Summary of The Budget and Economic Outlook: 2016 to 2026”

• CBO expects federal revenues to rise by 4 percent in 2016 to $3.4 trillion, or 18.3 percent of GDP.
  • Individual income taxes are projected to rise by 5 percent

• Beyond the 10-year period, if current laws remained in place, the pressures that had contributed to rising deficits would accelerate and push debt up even more sharply.
  • Such high and rising debt would have serious negative consequences for the budget and the nation:
    • The likelihood of a fiscal crisis in the United States would increase.
    • Federal spending on interest payments would rise substantially.
    • Interest rates rise from their currently low levels.

• Mandatory outlays will be $168 billion higher in 2016 than they were last year.
  • Major health care programs accounts for more than 60 percent of the projected growth…

• In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009
  • The 2016 deficit will be $544 billion, $105 billion more than the deficit recorded last year and is $130 billion higher than the one that the agency (CBO) projected in August 2015.

• The economy will expand solidly this year and next.
  • Also push up inflation and interest rates.

• Federal outlays are projected to rise by 6 percent this year to $3.9 trillion, or 21.2 percent of GDP. The result of
  • A nearly 7 percent rise in mandatory spending
  • 3 percent increase in discretionary outlays
  • 14 percent jump in net interest spending (factors: Interest rates are beginning to rise, and federal debt is growing.)

• Discretionary outlays for national defense in their first increase in five years will edge up slightly this year

• The budget deficit increases modestly through 2018 but then rises more sharply, reaching $1.4 trillion in 2026.NOTE: This is equal to President Obamas worst annual deficit in 2009. He and the Congress put America back on a path that can’t be sustained.
  • The projected cumulative deficit between 2017 and 2026 is $9.4 trillion.

• Growth in outlays would outstrip growth in the economy, and outlays would rise to 23 percent of GDP by 2026.
  • payments, offset somewhat by a decline (in relation to the size of the economy) in discretionary spending. NOTE: The things that the Federal Government is supposed to do per the Constitution become second tier and are crushed by Mandatory Spending. “A Government That Tries To Do Everything, Will Do Everything…POORLY!”
  • Almost half of the projected $2.5 trillion increase in total outlays from 2016 to 2026 is for Social Security and Medicare.

• CBO now projects a cumulative deficit that is $1.5 trillion larger than the $7.0 trillion that the agency projected in August 2015. NOTE: In one year the deficit picture worsened by $1.5 Trillion.

• The fiscal policies embodied in CBOs baseline would dampen GDP growth in 2017 and 2018. In addition, some aspects of fiscal policy under current law, particularly the Affordable Care Act and real bracket creep, are projected to dampen the supply of labor and therefore the growth of output through 2020. NOTE: As stated by Obama care opponents, the ACA is unaffordable, and driving up health care costs.

• Potential GDP will expand at an annual average rate of 2.0 percent, a significant slowdown from the average growth of potential output that was observed during the 1980s, 1990s, and early 2000s. NOTE: Marxist/Progressive/Socialist policies of massive government spending don’t work, except to impoverish the nation.

Update:

• 2016 Deficits Up Despite Record $1.9T In Taxes